A four-member committee, composed of Jane Knodell (P-Central District), Kurt Wright (R-Ward 4), Chip Mason (D-Ward 5) and Adam Roof (I-Ward 8), is tasked with deciding by the end of the week how the council will narrow four finalists to one buyer at a meeting scheduled for November 27. Under the resolution, Tucows, Keep BT Local, Schurz Communications and ZRF Partners must submit revised bids for the council to consider by November 20.
The council adopted the measure by an 11-1 vote.
The latest decision is yet another wrinkle in the sales process. The council was supposed to choose between the Toronto-based Tucows and the co-op Keep BT Local in a final vote last Monday, November 6. Instead, gridlocked after a pair of 6-6 votes, the council asked the two bidders to come up with a joint venture proposal by last Friday. The effort failed. Now, according to the council’s directive from last week, four bidders are back in the running.
Roof, who sponsored the resolution, acknowledged that he had heard frustration from constituents about the convoluted and lengthy procedure. “The process undoubtedly has had twist and turns,” he said. “This resolution will help us get to the finish line.”
“It’s crucial that we have a council that’s willing to compromise,” said Wright.
The return to four bidders reverses all progress the council had made in narrowing the field of finalists since September. ZRF Partners dropped out because of a possible conflict of interest and the council eliminated Schurz Communications in an October 16 vote.
Originally, the council had planned to have a buyer selected by July.
The city has until the end of the year to complete the sale. Otherwise, Burlington will lose 15 percent of the net sale proceeds as stipulated by an agreement with a creditor, Blue Water Holdings.
Monday’s resolution also bars councilors from communicating directly with bidders. That decision follows a controversy last week when Joan Shannon (D-South District) criticized Knodell and Wright for communicating with bidders.
Max Tracy (P-Ward 2) also offered an unsuccessful amendment asking that the mayor disclose their communications to the council.
The city council will have the option to meet with Burlington Telecom staff, visit the headquarters of each bidder and get a legal and financial analysis of all bids. Some councilors already visited Tucows in Toronto.
The bidder proposals will be made public soon after they are submitted.
Schurz Communications CEO Todd Schurz said in a phone interview Monday that the company would improve its public relations campaign now that it’s been given a second chance. Schurz praised the process as “robust” but said that earlier this fall, “half-truths and mischaracterizations” had circulated about his company’s customer service, prices and the political affiliations of his family members.
This time around, he said he’d try to tell Burlingtonians the company’s story more clearly. “We’d like to learn from our mistakes,” he said.
Faisal Nisar, head of ZRF Partners, did not respond to requests for comment.
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As someone at the meet said ” This show is so screwed up they should charge admission”
“Repeal and Replace” — the City Council President.
Delay & Pray
Keep Burlington Telecom Local has been tried and failed! We need to go with who can pay Mayor Kisss failure off so Burlington taxpayers arent liable. Seems like a no brainer. BTC has terrible cable and great internet service, so we arent going to be making Comcast nervous with the present service available!
i just dunno why there is so much blame game going on here.
it may have been the case that BT was grossly undercapitalized to begin with. that the startup costs were just sooo much greater than was expected. that once so much money was already dropped into the infrastructure (so that money is gone) and there’s a cash crisis, that the $17 million injection was necessary to not totally crash the whole project (and lose the whole shebang). perhaps Bob Kiss and Jonathan Leopold simply did what they had to do to keep the balloon afloat.
we have invested sooo much in this that i do not want to lock in a $10 million loss simply selling it to the highest private bidder who will take the money somewhere else. i want our $17 mil investment to be reflected in an excellent product and reasonable rates for generations of Burlingtonians to come (and maybe Winooskians and South Burlingtonians in the future). that’s the only way our $17 mil will ever be fully recovered.
if KBTL gets the deal, i would invest some 4 digits of my own money into BT and be a local stockholder. perhaps we could get another two or three thousand similar local investors to retire that Maine Fiber bond (at an usurious 14% per year) quickly.
the problem is that we bought high and we’re selling low. that, and to sell it prematurely, is sure to lock in a loss. even the $30 mil bid is probably far less than what the asset is worth, which is why it looks like such a juicy fruit for Ting or Shurtz. if it’s such a juicy asset for them to acquire, it will certainly be a painful asset for us to lose.